Oireachtas Public Accounts Committee member Kieran O’Donnell asked Mr Corrigan why the NTMA’s internal controls had not picked up the fraud.
“€3.2m might not be a huge sum in the context of €4.6bn, but it is roughly one third of what the Government needs to maintain home help care,” said the Fine Gael TD.
Mr Corrigan said liquidating a fund of this size involved hundreds of transactions over a number of months, which would have been impossible for the NTMA to monitor.
“Fraud by nature is very hard to detect. This was done by three members of State Street colluding with each other,” he said.
The PAC members urged Mr Corrigan to press the UK Financial Services Authority to conclude its investigation in the State Street incident in as timely a manner as possible and to then report back to the Committee.
The PAC members commended Mr Corrigan on the forthright manner in which he answered questions about the alleged fraud.
However, independent TD Shane Ross heavily criticised Mr Corrigan over salary levels at the NTMA. It was revealed during the hearing that there are 500 members of staff, including those at Nama. Of these:n118 earn up to €50k.
* 230 earn between €50k and €100k.
* 105 earn between €100k and €150k.
* 32 earn between €150k and €200k.
* 4 earn between €200k and €250k.
* 6 earn between €250k and €300k.
* 4 earn between €300k and €400k.
Mr Corrigan is on a salary of €416k.
Mr Ross said these figures “would make a banker blush”.
The NTMA chief said it was necessary to pay these salaries as they were market rates. Mr Ross asked Mr Corrigan — who joined the NTMA in 1991 — if he had been recruited from the market.
Mr Ross asked had Eileen Fitzpatrick, who in 2011 was appointed head of NewEra, been recruited from the market and he sought details of her salary. Mr Corrigan said she was “a valuable internal resource”, but he could not discuss her remuneration package.
In other questions, Mr Corrigan was asked did the Government need a deal on the bank debt to secure a full return to the markets.
He said a restructuring of the promissory notes would not change the overall debt level, but if they were rolled up into a longer bond, it would ease funding pressures over the next eight years. The Government must make a €3.1bn promissory note repayment every March until 2020.
The NTMA met 200 investors every year and the strategy was to “under-promise and over-deliver”. In terms of debt sustainability, Mr Corrigan said it was important to have visibility on when debt would peak and decline. Irish debt is forecast to peak at 121% in 2013 and drop from 2014 onwards.
US investment firm Franklin Templeton holds over 10% of Irish debt, but it could not sell off its holdings promptly without sustaining substantial losses, he said.
The NTMA has invested €20.6bn in Bank of Ireland and AIB. It is now worth €8bn.